EconomyxAI · Sector Watch October 2013Released October 16, 2013 |
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Conditions index +0.43 avg of 11 sectors, −2 to +2 |
| Outlook index +0.23 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released October 16, 2013, with information collected on or before October 7, 2013. | | ■ | Activity continued to expand at a modest to moderate pace; growth slowed in Philadelphia, Richmond, Chicago and Kansas City. | | ■ | Consumer spending and tourism expanded, manufacturing grew modestly, residential construction increased moderately and energy held at high levels. | | ■ | Uncertainty rose with the federal government shutdown and debt ceiling debate; price and wage pressures stayed limited. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Turning up | +0.56 |
| Energy
XLE
▲ Turning up | +0.45 |
| Real Estate
XLRE
▶ Steady | +0.43 |
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| Weakest prospects Financials
XLF
▶ Steady | −0.07 |
| Health Care
XLV
▶ Steady | −0.04 |
| Utilities
XLU
▶ Steady | +0.00 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Information Technology
XLK | | +0.56 | Favorable | +0.85 | +0.74 | ▲ +0.08 | | 2 | Energy
XLE | | +0.45 | Leaning Favorable | +0.91 | +0.50 | ▲ +0.43 | | 3 | Real Estate
XLRE | | +0.43 | Leaning Favorable | +1.09 | +0.46 | ▶ −0.33 | | 4 | Industrials
XLI | | +0.32 | Leaning Favorable | +0.65 | +0.49 | ▶ −0.14 | | 5 | Consumer Discretionary
XLY | | +0.32 | Leaning Favorable | +0.73 | +0.35 | ▶ −0.03 | | 6 | Communication Services
XLC | | +0.24 | Leaning Favorable | +0.48 | +0.00 | ▲ +0.45 | | 7 | Consumer Staples
XLP | | +0.04 | Neutral | +0.09 | +0.00 | ▶ +0.09 | | 8 | Materials
XLB | | +0.04 | Neutral | +0.13 | +0.00 | ▶ −0.05 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ −0.01 | | 10 | Health Care
XLV | | −0.04 | Neutral | −0.16 | +0.00 | ▶ +0.02 | | 11 | Financials
XLF | | −0.07 | Neutral | +0.00 | +0.00 | ▶ −0.17 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.50 |
Modest to moderate expansion; four districts slowed. | Employment growth modest; caution tied to ACA and fiscal policy. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price and wage pressures limited; building materials firm. | Financial conditions little changed; business loan demand edged up; credit quality improved. | Cautiously optimistic but uncertainty from shutdown and debt ceiling. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | +1 | +1 | +1 | · | · | · | +1 | · | +1 | +1 | +1 | +1 | | Health CareXLV | +1 | · | · | +1 | · | · | · | · | · | · | −1 | −1 | | FinancialsXLF | · | −1 | +1 | · | · | · | · | −1 | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | +1 | +2 | +1 | +1 | · | +1 | · | +1 | +1 | −1 | · | +1 | | Communication ServicesXLC | +1 | · | · | · | · | · | · | +1 | · | · | · | +1 | | IndustrialsXLI | +1 | · | +1 | +1 | −1 | +1 | · | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | +1 | · | · | · | · | +1 | · | · | · | | EnergyXLE | · | · | · | · | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +2 | +1 | | MaterialsXLB | · | · | −1 | +1 | · | · | −1 | · | +1 | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +2 New York Auto sales increasingly robust; hotel occupancy above 90 percent. Why it matters: Large NY weight lifts Discretionary. | Real Estate +2 Minneapolis, Dallas Robust residential construction; strong housing and leasing. Why it matters: Two strong reads drive Real Estate. | Information Technology +1 San Francisco Expected pick-up in hardware and software spending; IPO pace picked up. Why it matters: SF carries 47% of IT weight. | Industrials +1 broad−based Broad-based Manufacturing expanded modestly; autos and aerospace strong. Why it matters: Industrials positive in most districts. | Energy +1 Dallas, Kansas City, Minneapolis, Richmond Oil and gas activity at high levels or expanding. Why it matters: Energy positive with Dallas weight. | Real Estate +1 broad−based Broad-based Residential real estate improved at a moderate pace. Why it matters: Broad positive RE. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Continues to grow at varying pace. |
| New York Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Slowed to a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +0.5 Outlook ▲ Improved modestly. |
| Atlanta Growing +0.5 Outlook ▲ Expanding slowly. |
| Chicago Growing +0.5 Outlook ▲ Growth slowed a bit. |
| St. Louis Growing +1.0 Outlook ▲ Grown at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Expanded modestly. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco (+1, 47% weight) dominates the weighted IT score.
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| | Consumer Discretionary — New York (+2) lifts the weighted score above the unweighted average despite Kansas City (-1).
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |